The Future of Financial Self-Sabotage  10 Surefire Ways to Never Become a Millionaire. When Austin Power’s Dr. Evil set out to extort the world for a million dollars we all cracked up. How quaint, we giggled, when everyone knows that in today’s big bucks world billions and trillions are where it’s at. But that’s not strictly true. Reaching a million dollars in personal savings or investments is a still significant milestone. Ask yourself, is it possible for you to get there or are your actions guaranteeing you never will? 10 Ways to be sure you will never become a millionaire.

I truly believe with enough time, effort and smart financial decisions, anyone in this country can become a millionaire. Accumulating a net worth north of a million bucks isn’t easy but it isn’t necessarily all that complicated either. Hundreds of not-born-rich Americans have achieved it by scrimping and saving and their ranks are increasing every day. On the other hand, a significantly larger number of citizens can’t even dream about achieving financial independence, let alone becoming multi-millionaires. They would be happy to just escape the living paycheck-to-paycheck hamster wheel, barely scraping by, and possibly one emergency away from financial ruin.

I’m going to share with you the 10 most common reasons preventing someone from accumulating a seven or even eight-figure nest egg.  If you recognize yourself here, achieving financial independence is probably going to mean making some changes.

 REASON #1 You will never become a Millionaire

Being afraid of investing

Hear me now: No investments mean no becoming a millionaire. “Cash is king” is an old saying, but cash doesn’t earn income or interest.  After inflation, cash under your mattress loses value every day.  Unless you are a movie star or tech titan with monster paychecks (and equity compensation) – not the most stable professions in the world – you will need to do some investing to accumulate any substantial net worth. To achieve financial independence, most people will need the help of compounding interest and long-term growth of investments.

Of course, there are risks associated with investing in anything like stocks, bonds, mutual funds and yes even real estate. But the risks of not investing are even greater; not having enough money to maintain your lifestyle in retirement is one big, glaring example.

Accumulate a Million Dollars CASE STUDY 1*: Let’s say you wanted to accumulate $1 million dollars by the time you were 70.

• If you started at 22 and earned 1% (after taxes and fees) you would need to save $1354 per month.
• BUT with the help of compounding interest, if you earned 10% (after taxes and fees) you would only need to save $71 per month. That is the magic of compounding interest. Same end result but you can get away with saving a whopping 95% less!

You may also want to give this a read: The First Million is the Hardest How to Build A Million Dollar Net Worth

 REASON #2 You will never become a Millionaire

Not saving enough to become a millionaire

Whether you are afraid of the stock market or think you have the perfect investment portfolio, if you don’t save enough you will still never accumulate a million dollars or more. It’s not what you make but what you keep.  I’ve spoken with people who make more than a million dollars per year and really have very little to show for it.  They may be very successful, but if they never put anything away they won’t ever accumulate a significant amount of wealth.  A penny saved is worth nearly two pennies earned.

The best advice I can give you is to stop procrastinating and start saving now.  Even if you have to start small, you will better off than if you never started at all.  If you may be surprised and how good you feel know you are on a path to reaching your financial goals.

Million Dollar CASE STUDY 2*: Let’s say you are 40 years old and want to accumulate a million dollars by age 70.

• Earning 1% net of fees and taxes you would need to save $2383 per month.
• Even with 10% returns you still need to save $442 per month.
• The numbers continue to grow the longer you wait. Starting at 40 versus 22 means you need to save nearly six times as much per month. GET STARTED NOW!  No matter your age, the sooner you get started the better off you will be.

 REASON #3 You will never become a Millionaire

Living beyond your means

You have lots of company on this one.  Many people finance their own version of the American Dream by straining their budget to a breaking point.  Living paycheck to paycheck (or worse, fall behind) has become the norm.  The best-case scenario here (which isn’t very good) is that you aren’t accumulating wealth; the worst case is that you are building an insurmountable pile of debt.

According to the National Foundation of Credit Counseling, a full third of US households carries credit card debt from month to month.  This often means thousands of dollars per year wasted on crazy high interest rates.

When it comes to living large, “Fake it ‘till you make it” is an amazingly efficient way to never make it. The “Keeping up with the Joneses” game is an ever-increasing target that is pretty much impossible to reach. Besides the Joneses are probably about as broke as you are, so nothing to emulate there.

 REASON #4 You will never become a Millionaire

Financial Self-Sabotage -Throwing Money away on debt payments

This one goes hand in hand with Living Beyond Your Means. I always think of the Debt-Free Guys John & Dave when talking about credit card debt.  The financial blogger friends of mine were drowning with a whopping $51,000 in credit card debt. That translated into over $10,000 in interest per year just to stay even.  (What would you do with an extra $10,000 per year?) They finally managed to pay it off.  It wasn’t easy but it was necessary.

Paying off debt like mortgages or student loans can actually help build your credit. But consumer debt can make achieving financial independence nearly impossible.

Get a handle on it today; the longer you procrastinate the bigger a hole you will be digging out of, and the more interest payment you will flush down the toilet.

REASON #5 You will never become a Millionaire

Ignoring the little things that really add up

Every day we are barraged by infinite ways to waste money, often wearing the sinister disguise of ‘convenience’. You pick up some magazine at the grocery checkout line and toss it into your cart even though you could probably get a year’s subscription for the same price.  Or you check  20 bags when flying when you could get away with a carry-on. The list goes on and on.

I had a super successful friend with a multimillion-dollar income cancel Netflix because she wasn’t watching it. She preferred Amazon Prime. So what? She couldn’t afford Netflix?  Of course, she could but as someone who was money smart, she paid attention to where her funds were going. Paying attention costs you nothing but can save you plenty. Now if someone making over a million dollars per year sees the value of paying attention and not wasting $10 per month, maybe you can too.

REASON #6 You will never become a Millionaire

Making unhealthy choices

I actually mean health choices here.  According to a U.S. Trust study, 98% of millionaires consider good health to be their most important personal asset.  If you aren’t healthy, no amount of wealth or privilege really matters all that much.

Spend what you need to make sure you get all the necessary screening and physicals recommended by your health care professionals. Exercise and eat healthily too. To be sure, real food costs more than junk food but this is the one area where I advocate spending what you need to.

 REASON #7 You will never become a Millionaire

Not having a spending plan

The word ‘budget’ makes many people cringe. I hate it too which is why I prefer to operate with a spending plan.  People who are good with money do not treat their finances as some random event, they use them and work with them on purpose and with purpose. Money doesn’t just take care of itself. Yet, so many of us are still ‘surprised’ when a big bill comes in. A spending plan is about managing expectations so there are no horrible surprises and you can save up for the pleasures in life too.

Start with base expenses that fit easily within your income. From there, the spending plan paves the way for bigger purchases whether it be a dream vacation or a new car or whatever.

Without a spending plan, you will probably just keep paying out whatever is in your bank account and never have money when big-ticket items (or college tuition for your kids, or buying a home in Los Angeles for that matter) jump onto your wish list. Or worse, these will end up on your credit card, accumulating disastrous amounts of interest.

REASON #8 You will never become a Millionaire

Poor Tax Planning

Don’t forget it’s not what you make but what you keep. People love tax refunds, it’s like free money, right?  NO! In reality, you just gave Uncle Sam an interest-free loan and often while you are paying credit card interest for the privilege.

If you are getting a big refund each year, consider adjusting your withholdings to lower the taxes being taken out. This may just free up enough cash so you can actually start saving, or put a bigger dent in your credit card debt.

Minimizing taxes is a great way to help keep more of the money you are making.  Talk with your Fiduciary Financial Planner to see what other tax-saving strategies might be appropriate to help you keep more of your hard-earned money.

 REASON #9 You will never become a Millionaire

Choosing the wrong career path

Accumulating wealth is easier to do the earlier you get started. The better paycheck your career provides the easier it is to put significant money away.  But if you hate your job it will show and eventually translate into slower career advancement.  For some, it’s easier said than done but choosing a career path that has the income potential to pay for your lifestyle and is something you really enjoy is a major life quest.  For some, it doesn’t happen in the first flush of youth. That said, later is better than never whether it comes to getting a job that suits you that will lead to a good income.

 REASON #10 You will never become a Millionaire

Lacking purpose and passion in life

Having a passion will make it easier to get up every morning and be the best that you can be.  I’ve observed that many of my most successful and happiest clients love what they do.  That extra spring in their step is noticeable.  Many people choose a job based on just the salary rather than the overall quality of life it will provide. Follow your passions and dreams and the money should follow. This may seem rather rainbows and Unicorns naïve but time and time again, I’ve seen how true it is.

So there you have it. You can position yourself for prosperity by sabotaging financial self-sabotage. And you don’t have to go it alone. Work with a fiduciary financial planner to get your financial house in order and maybe, just maybe, you too will make it to millionaire status.

Live for today, Plan for Tomorrow.

DAVID RAE, CFP®, AIF® is a Los Angeles-based fiduciary retirement planner with DRM Wealth Management. He has been helping friends of the LGBT community reach their financial goals for over a decade. He is a regular contributor to the Advocate Magazine, Investopedia and Huffington Post as well as the author of the Financial Planner Los Angeles Blog. Follow him on Facebook, or via his website www.davidraefp.com

First Million is the Hardest How to Build A Million Dollar Net Worth

The opinions voiced in this article are for general information only. *Case Study Examples used as illustration only, not indicative of any particular investment, actual results will vary. Assume reinvestment of dividends with no consequences of fees or taxes.  Past performance is not a guarantee of future results.